August 2016
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To research the effect of controllable lead time on supply chain decision making, the inventory coordination issue of a supply chain composed of a supplier and a retailer was investigated. The optimal strategy composition of supplier and retailer in decentralized, centralized and coordinate model were obtained by assuming the lead time was controllable. The research showed that the overall chain profitability was improved based on the coordination mechanism acted by credit option and premium price, and the additional profit allocated between supplier and retailer rationally was realized. The coordinated wholesale price and the length of coordination interval were increased with retailer's capital opportunity cost and decreased with supplier's capital opportunity cost. A numerical experiment was conducted to verify the proposed model and relevant results.